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ARMONK, N.Y. - A generation ago the Justice Department attempted to prove IBM was a dangerous monopoly, a corporate bully that should be busted into pieces.
The lengthy case eventually was abandoned. But ironically, the world's largest computer company has concluded the government lawyers were on the right track - though for entirely different reasons.
International Business Machines Corp. has decided its monolithic structure is not the source of its strength and ability to crush competitors, as the government alleged, but the reason it has fallen behind in the fast-moving computer industry.
IBM embarked last December on a bold plan to break the nation's fourth-largest industrial corporation into a confederation of 13 smaller companies.
Carried to its conclusion, IBM will end up a holding company, owning various percentages of stock in its offspring while the public owns the rest. Divisions even could be sold off entirely if they don't meet expectations.
The scheme, devised chiefly by John F. Akers, IBM's chairman and chief executive, is aimed at eliminating the stifling bureaucracy and plodding decision-making that threaten IBM's competitiveness and financial health.
Nine months later, IBM has made progress on its new course, though the results are uneven and the changes have yet to have much impact on profit.
But Akers is pleased so far. He says the improvements are coming quicker than he expected.
"People are taking ownership and control and making decisions much more independently and much faster than I had thought," he said in a recent interview.
Akers said the revamping actually dates to 1988, when he organized the company along product lines, such as mainframe, minicomputers and personal computers. Previously, similar functions could be spread among different divisions.
That plan, coupled with job cuts and plant closings, was designed to boost profits. For a while it appeared to work - IBM reported its second-best earnings ever of $6.02 billion in 1990.
But last year things fell apart.
The gulf war and the recession crimped customer spending. Price chopping in the industry grew rampant, eating into earnings. A revamping of several key IBM product lines prompted customers to delay orders until the new models were available.
Akers said 1991 was "the most difficult year in the history of the computer industry."